What's a personal finance tip or hack that should be common knowledge but isn't?

[rezene]

I'll start: when leaving a company, and if you were enrolled into its group health insurance (paying user; free ones don't apply), you can talk to the insurer and convert/merge it into an individual policy to take advantage of the PED years accrued there. Here's a bit more information on ET.

 

[dhollandhurley]

@rezene Banks are not your financial advisors. Don't take their advices. They're business people and think about their profit. You need to think about your situation yourself. So read up on personal finance issues.

 

[how2101]

@dhollandhurley I use their advice as a warning. If a fund requires a bank to aggressively pitch it to customers, they're not a sound option.

 

[hugues]

@how2101 That's a great rule of thumb!

 

[ericcgregg]

@dhollandhurley People who are legally obligated to optimize your money are called FIDUCIARY.. not all financial advisers are a fiduciary, but all fiduciary are financial advisers..

 

[joeymaroni95]

@ericcgregg Are there fiduciaries in India? How do you differentiate?

 

[brknbutrfly35]

@joeymaroni95 Yes there are, visit www.basunivesh.in or .com for a starting list of fiduciaries or fee only investment advisors

 

[flipflop2234]

@rezene Whenever you take out a secured loan of any kind, buy a pureplay life insurance cover (called term insurance) of the loan+interest amount for the duration of the loan. This ensures that your dependents will not be forced to pay off the loan to protect the collateral in case of your death. Insurance costs will be negligible compared to your EMI.

An excellent tip from Monika Halan's book

 

[daizy]

@flipflop2234 To add to this:

A pureplay life insurance is called a Term Insurance in the market. Make sure to get this, and ideally get it separately from your home loan. See comment below for how much.

I am working on a case where someone was sold a Critical Illness cover along with his home loan. Now the insured person is dead, and the insurance company is playing with words to get out of their commitment to pay the proceeds.

Home loan providers tend to bundle whichever insurance policy they haven't met their targets on, and customer be damned.

 

[ba1992]

@flipflop2234 Can you please elaborate on this? Also, can we take this insurance from an entity different than lender?

 

[flipflop2234]

@ba1992 Well, the idea is simple. You can buy an online term plan instantly these days. Say you take a 50L loan over 15 years to buy a flat. In that case, you should take out a life insurance plan worth 50L+interest that covers you for 15 years. The cost will be nominal, something like 5000-10000 per annum depending on your health, age and other factors.

But what it results in is the peace of mind that the loan will not burden your next of kin in case of your death. I find it to be worth the cost no doubt

 

[ba1992]

@flipflop2234 Understood, thank you very much.

 

[flipflop2234]

@ba1992 ah, forgot to answer your 2nd question. buy it from any reputed insurer with a good claim settlement history. Doesn't matter who you get it from

 

[heisalive1]

@flipflop2234 can u suggest some books written by her

 

[jmullins1227]

@rezene Always pay your credit card dues in full and not the min due every month.

 

[zippo387]

@jmullins1227 It will hurt like hell if you understand how much you have paid to bank. Its the beginner mistake no one talks about also to pull cash out of the Credit card

 

[cehughes]

@jmullins1227 Use credit card like debit card, if you don't have the money in bank, don't use your card, it's simple. Use auto-pay to pay your credit card bill in full automatically through NetBanking.

 

[uponthehorizon]

@jmullins1227 Also increase your credit card limit after substantial salary increase (even if you don't need it) , this way your utilisation will be low and have good impact on cibil score.

 

[minabell]

@rezene Never mix insurance and investment. Not a hack, not a tip, but should be common knowledge.

 

[pda543]

@minabell Yes. A relative who is also an insurance agent wanted me to buy cashback , guaranteed insurance but i went for simple term insurance. Wont mix investment and insurance.